How should Labour handle the AV issue?

It would have been more of a surprise if the coalition had decided to hold its referendum on voting reform on a different day; for example in October.

The working assumption for the last month has been that the ballot would co-incide with the May 5 local elections, as the BBC is reporting this morning. The only arguments against that had been that a] it could confuse people if they had to vote on two separate things and b] the Electoral Commission may not be in favour. Neither seem to be major obstacles.

The Lib Dems are itching to get on and hold the referendum as soon as possible; for many it is the one major reason for being in government – as strange as that may seem to sceptics.

Their first challenge will be explaining the AV system to people and then convincing them to care one way or another. The second will be rebutting a strong anti campaign by their supposed friends in the Tory party.

Meanwhile Labour will not hesitate to exploit the situation to its own advantage. Forget the fact that some Labour figures have gone public on their enthusiasm for electoral reform in recent years. (Some have seemed more sincere than others). Key frontbenchers see the referendum as a golden opportunity to force the downfall of the coalition, as splits appear between the yellow and blue partners.

Ed Miliband has claimed that he would campaign in favour of changing the voting system. David Miliband has also come out this morning saying he agrees that AV would be better. Andy Burnham seems much less keen while I doubt the other two will commit to backing the yes vote. (UPDATE: Balls says he is keen on AV).

Even if one of the Miliband brothers becomes leader and backs reform they may still choose – for tactical reasons – to give their own MPs a free hand to campaign either way. Many Labour figures believe that by remaining on the sidelines the opposition party will be able to stand back and let the coalition implode as the Lib Dems fail to get the result they want.

This is the prism through which to view Labour’s tactical decision to train its guns on the Lib Dems over the Budget and the VAT rise.

That’s not to say that there is some bitterness between the two L parties. Emily Thornberry, an MP who survived a Lib Dem challenge in her north London constituency, tells me: “People need to know that they are opportunists and unprincipled, it’s our duty to tell them.”

Some wise heads within Labour are already warning, however, that the Harman strategy is mistaken. Why? Because if the “Liberals” collapse at the next general election their seats are more likely to swing back to the Tories. They also fear that if relations become too bitter it will impossible to create a future Lib-Labour coalition. “I think Harriet’s got it wrong, we’ve gone overboard attacking the Lib Dems when we should be concentrating our fire on the Tories,” says one former cabinet minister.

But another tells me there is a short game and a long game. The two-year strategy is to put so much pressure on the Lib Dems that the coalition falls apart. If that fails there will still be three years to start love-bombing Lib Dems once more, if necessary.